Question

Elsa deposits $800 into an account that pays simple interest at a rate of 3% per year. How much interest will she be paid in

the first 5 years?

Answer 1

To calculate the amount of interest Elsa will be paid in the first 5 years, we can use the formula for simple interest:

Interest = Principal * Rate * Time

Where:

Principal = $800 (initial deposit)

Rate = 3% (or 0.03 as a decimal)

Time = 5 years

Plugging in the values:

Interest = $800 * 0.03 * 5

Calculating:

Interest = $120

Therefore, Elsa will be paid $120 in interest in the first 5 years, assuming the account pays simple interest at a rate of 3% per year.